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Auto lenders quietly install a digital repo-man

Companies that lend to people with bad credit put in a black box that allows them to track the purchased car — and shut it down if payments are late.

A Passtime USA starter interrupter, ready for installation in a vehicle. (ebay)

Some Passtime USA products keep a location history of drivers, allowing lenders to keep tabs on where a driver has been. (Passtime USA manual)

By Craig DessonDigital Producer

Wed., Jan. 14, 2015

A little-known black box buried in the guts of many GTA vehicles makes drivers with poor credit the hapless targets of what is becoming a 24-hour surveillance culture.

Known as a starter interrupter, the GPS-equipped, wallet-sized box is popular with auto loan companies: If the owner stops making payments, the lender can send a signal to the box, disabling the vehicle by shutting off the starter. The GPS function also allows for tracking the customer’s movements.

Some Passtime USA products keep a location history of drivers, allowing lenders to keep tabs on where a driver has been. (Passtime USA)

Thousands of starter interrupters have been on the roads in Canada for years, but in Ontario, little has been said about how they’re used and the information they allow lenders to collect.

Consumer protection laws have curtailed their use in Quebec, and serious questions are being raised about their safety in the United States, following reports about moving cars being shut down remotely — though at least one company that makes them denies that’s even possible.

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A Nevada legislative committee investigating the use of starter-interrupters by subprime auto lenders last year heard testimony from T. Candice Smith, a Las Vegas woman who said the device shut off her car twice while she was driving.

“All of a sudden, the steering wheel locked up and the car shut off,” she testified. “I was barely able to make it to the left shoulder. I was scared and shaking. These devices are extremely dangerous.”

The starter-interrupter, she said, made her feel “that someone else was in control of my vehicle, my ability to get to work, to a safe place such as my home, and my life.”

Though it has yet to receive a formal complaint, the Office of the Privacy Commissioner of Canada is “actively following the issue, specifically the data collection made possible by the growing deployment of automotive sensors,” according to spokeswoman Tobi Cohen.

Jeffrey Newhouse, president of Canadian Title Loan, an Oakville company that uses starter-interrupters, said customers with bad credit agree to having one installed when they sign up for a loan.

The company disables a car only in what he considers extreme circumstances — for example when the customer has been unreachable for 90 days or more.

Customers are grateful, he claims: “It allows us to take a chance on them, lending them money when nobody else would.”

George Iny, president of the consumer advocacy Automobile Protection Association, is skeptical of such arguments.

“To repossess a vehicle, you sometimes have to get the permission of the courts,” he says. “With this device, it’s as simple as a flip of a switch.”

People with bad credit ratings, he says, “have few places to turn when buying a car.” When they sign for a loan, they’re “told that’s what you have to do.”

Sympathetic to lenders’ problems as well, he doesn’t want to see the device banned, just covered under customer protection legislation.

In Quebec, the government requires lenders to provide consumers with 30 days’ notice before they repossess a car, which can only be done by a bailiff. Starter-interrupters are only allowed to track cars, said a spokesperson for Quebec’s consumer protection ministry.

In Ontario, the Collection Agencies Act, which prohibits “undue, excessive or unreasonable pressure,” doesn’t apply to starter interrupters because they’re installed by auto lenders and not a collection agency, said a spokesperson for the Ministry of Consumer Services. And, “it appears that these devices are installed with the borrower’s consent, as part of the loan approval process.”

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